Weyco Group, Inc. reported earnings in the first quarter ended March 31 jumped 80 percent. Sales were up 6 percent as double-digit gains at its Florsheim dress brand offset flat year-over-year sales for its other footwear brands, including Bogs.

First Quarter 2023
Consolidated net sales were a first-quarter record of $86.3 million, up 6 percent compared to its previous record of $81.4 million in 2022. Consolidated gross earnings increased to 43.1 percent of net sales compared to 35.8 percent of net sales in last year’s first quarter, due mainly to higher gross margins in its North American wholesale segment. Operating earnings were a first-quarter record of $10.4 million, up more than 90 percent over last year’s first-quarter operating earnings of $5.4 million. Net earnings were a first-quarter record of $7.4 million, or $0.78 per diluted share, up 84 percent compared to $4.1 million, or $0.42 per diluted share, last year.

North American Wholesale Segment
Net sales in its wholesale segment reached a first-quarter record of $69.9 million, up 4 percent compared to $67.1 million in the first quarter of 2022. Wholesale sales increased due to higher unit selling prices, while pairs shipped decreased 5 percent. Florsheim posted 15 percent growth for the quarter, driven by higher sales of dress and dress-casual footwear, and achieved record quarterly sales on top of record sales for the brand last year. Net sales of its other major brands, Nunn Bush, Stacy Adams, and BOGS, remained relatively steady with last year’s robust first-quarter results.

Wholesale gross earnings were 38.2 percent of net sales compared to 30.0 percent of net sales last year. Gross margins improved due mainly to selling price increases implemented in 2022 to address higher costs. Last year’s first quarter gross margins were negatively impacted by higher inbound freight costs as a result of the global supply chain issues ongoing at that time, which have since eased.

Wholesale selling and administrative expenses totaled $17.9 million, or 26 percent of net sales, for the quarter compared to $15.3 million, or 23 percent of net sales, in last year’s first quarter. This year’s expenses included higher employee costs. Wholesale operating earnings reached a first-quarter record of $8.8 million, up 82 percent compared to $4.8 million in 2022, driven by the higher sales and gross margins this year.

North American Retail Segment
Net sales in its retail segment were a first-quarter record of $8.9 million, up 14 percent compared to its previous record of $7.9 million in 2022. The increase was primarily due to higher sales on the Florsheim and Stacy Adams websites. Brick-and-mortar sales also increased for the quarter.

Retail gross earnings as a percent of net sales were 66.3 percent and 65.9 percent in the first quarters of 2023 and 2022, respectively. Selling and administrative expenses for the retail segment were $4.6 million compared to $4.4 million last year. As a percent of net sales, retail selling and administrative expenses were 52 percent in 2023 and 55 percent in 2022. This decrease was primarily due to lower e-commerce expenses relative to net sales; primarily outbound freight and advertising costs. We realized cost savings during the first quarter as a result of measures taken over the past year to control costs.

Retail operating earnings were a first-quarter record of $1.3 million, up 55 percent compared to $828,000 last year. This increase was primarily due to higher sales and improved profitability in its e-commerce businesses. Brick-and-mortar operating earnings were also up for the quarter.

Other Operations Segment
Weyco’s other operations consist of its wholesale and retail businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). Other net sales for the first quarter of 2023 totaled $7.5 million, up 17 percent compared to $6.4 million in 2022. In local currency, Florsheim Australia’s net sales were up 24 percent, with sales up in both its retail and wholesale businesses. Last year’s sales volumes in Asia were negatively impacted by lockdowns imposed in Hong Kong during the quarter.

Other gross earnings were 60.5 percent of net sales compared to 59.6 percent of net sales in last year’s first quarter. Other operating earnings recovered to $275,000 in 2023 up from operating losses of $243,000 last year.

“We started the year strong, setting a first-quarter sales record and generating robust record-level earnings in both our wholesale and retail segments,” said Thomas W. Florsheim, Jr., the company’s chairman and CEO. “Our topline growth was driven by the exceptional performance of our Florsheim brand which maintained its strong momentum after unprecedented growth in 2022. Our earnings boost reflected the strategic measures we’ve taken to address the rising costs in our business. We believe our company-wide successes over the past year have positioned us well to endure potential changing market conditions ahead.”

On May 2, 2023, Weyco’s Board of Directors declared a cash dividend of $0.25 per share to all shareholders of record on May 26, 2023, payable on June 30, 2023. This represents an increase of 4 percent above the previous quarterly dividend rate of $0.24.

Photo courtesy Florsheim